blogging on issues relevant to a B-school business law course

Huawei and Corporate Espionage

Posted by William Steck.

Huawei, a multi-national, Chinese-based telecom company has again found itself in the headlines for the wrong reason. This time the corporation is facing several new lawsuits accusing it of corporate espionage.

For years, Huawei has been seen as an industry leader, recently producing some of the first 5G compatible phones, but despite its advanced engineering tactics, Huawei has been banned from entering the U.S. marketplace. The ban stems from fear of government espionage shared by both U.S. government officials and consumers. Officials and consumers believe that if the company were to enter the U.S. marketplace, it would be pressured by the Chinese Government to create back doors in its products, leading to massive breaches in U.S. national security and consumers privacy.

Although allegations of corporate espionage are not new to Huawei, few have been able to prove it, until now. In a new report, the U.S. Justice Department states that in 2013, a Huawei engineer stole a robotic arm from a T-Mobile factory. After stealing this piece of highly coveted intellectual property, the engineer proceeded to photograph it and then return it the next day, claiming he had taken it by “mistake.” The report goes on to detail a Huawei bonus program created to incentivize its workers to steal information from competing corporations. Similar suits against Huawei are also underway in Texas, Australia, Britain, German, and Poland.

Unethical and illegal actions, like the ones taken by Huawei engineers, seriously damage companies that lose billions of dollars in trade secrets and intellectual property as well as society as a whole. This year at CES in Las Vegas, 5G was all the rage. New home Wi-Fi routers from D-Link and other manufactures will allow consumers to access the internet without the need for a cable modem. This could benefit those who work from home, as well as those who live in remote areas who could finally gain access the internet.

But allegations against Huawei continue to keep the technology out of reach for millions of people by reducing competition in the market and by inflating costs. Despite their current situation, former employees claim the company’s goal is to surpass the United States as the dominant technological superpower by 2025. In order for the U.S to remain as the dominant technological superpower, courts in the U.S and around the world will need to take a hard stance on corporate espionage and hold Huawei accountable for their actions. If not, corporations, governments, and consumers could be at risk to lose even more intellectual property and personal data.

William is a business student at the Stillman School of Business, Seton Hall University.